BP allowed to buy more oil and gas leases in Gulf of Mexico

(AP Photo/Gerald Herbert)In this aerial photo taken in the Gulf of Mexico more than 50 miles southeast of Venice on Louisiana's tip, the Deepwater Horizon oil rig is seen burning Wednesday, April 21, 2010.

WASHINGTON — BP PLC can purchase oil and gas leases in the Gulf of Mexico during the first such sale since the company’s Macondo well blew out and spawned a massive oil spill last summer, a top official with the U.S. Interior Department said Thursday.

Despite its role in one of the largest environmental disasters in U.S. history, the company’s overall safety record is "close to the top" among its industry peers, said Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, or BOEMRE.

"The question is, do you administer the administrative death penalty based on one incident," he told reporters. "I’ve concluded that that’s not appropriate in these circumstances. In part, you make that judgment on how they respond after this."

The House Committee on Natural Resources on Thursday heard testimony from Bromwich and six other witnesses, including Coast Guard officials and top executives of BP, Transocean and Halliburton.

The hearing was called to discuss a report on the spill released recently by BOEMRE and the Coast Guard. However, much of the attention of lawmakers, both Republicans and Democrats, was directed to the actions of government regulators in the spill’s aftermath.

Rep. Ed Markey, D-Mass., told Bromwich that his agency should reconsider allowing BP to participate in the December sale of oil and gas leases in the Gulf.

Markey also criticized the amount of fines that the Interior Department announced Wednesday that it planned to issue against BP, Transocean and Halliburton. These could total no more than about $21 million for BP — an amount that the oil giant makes in just 7 hours, Markey said.

"That fine is nothing more than a slap on the wrist," he said.

Bromwich agreed with that point, saying the fine amounts are "trivial" and Congress should pass legislation to increase them dramatically.

The levies announced this week do not include fines the government is expected to issue under the Clean Water Act, which could total between $5.4 billion and $21.1 billion.

While Democrats voiced some disagreement with Bromwich and his bureau, Republicans expressed much more.

Rep. Doc Hastings, R-Wash., suggested that the agency might have waited to announce fines against the companies until just before Thursday’s hearing. The fines were initially expected to be announced late last month, on the week that Thursday’s hearing was initially scheduled, Hastings said. But the hearing was delayed, and then the fines weren’t announced until Wednesday evening — an "extreme coincidence," in Hastings’ view.

"I have serious questions about the timing of these actions, and whether or not they were an effort by the executive branch to time the legal penalties to influence, affect or potentially interfere with official activities of the legislative branch," he said.

Speaking with reporters after testifying at the hearing, Bromwich flatly denied delaying the penalties to coincide with the hearing, saying he’s been working to get the fines levied as quickly as possible and the delay was the result of agency staff needing to review the fines further.

Michael Bromwich

"There was absolutely no effort to game this or to time this for any purpose," Bromwich said.

Rep. Jeff Landry, R-La., questioned Bromwich at length about whether the agency had the authority to regulate businesses that are subcontracted for drilling work, such as Transocean and Halliburton, or only well owners, such as BP.

Landry maintained that federal law gave Bromwich’s agency no such powers over subcontractors, adding that regulation of this type would make it less clear who is responsible for accidents. Bromwich said such regulation is necessary, and cited the federal law he believes grants the authority.

Landry and other Republicans also continued to criticize Bromwich’s agency for not moving quickly enough to grant new drilling permits in the Gulf, repeating claims that permit applications have ballooned to 3,600 pages and take hundreds of days to process.